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Timing’s of the Essence for Agency Layoffs

NEW YORK–Yes, client spending is down, and account reviews have been rare. But layoffs last week at shops in New York, Chicago, Minneapolis and San Francisco also illustrate that the year is largely over from a new-business perspective.

That is because it is too late for significant revenue from future new-business wins to be realized in 2001, sources said. The transition of an account from one agency to another takes months, and typically the new agency will not produce work right away. “It’s the kind of thing where you know how the book’s going to end–and it’s a happy ending–but you still have to make cuts,” said one source.

So while Publicis & Hal Riney in San Francisco remains in contention for Starz Encore Group’s $40 million account, the shop had to lay off about 10 staffers, due in part to the evaporation of its estimated $10 million Webvan business, sources said. (Web van closed its doors earlier this month.) An agency rep could not be reached.

In New York, Lowe Lintas & Partners cut 40-50 staffers, or about 7 percent of its work-force, following a cut of 18 in May. Addressing the layoffs, Rob Quish, the agency’s New York president, said, “These are never nice.” However, he added, there will not be further cuts this year. “That’s how we planned it,” he said.

Meanwhile, the Chicago offices of Ogilvy & Mather and a subsidiary, OgilvyOne, let about 40 staffers go–roughly 16 percent of its staff, said sources. Linda Garrison, the agency’s co-managing director, who declined to discuss the number of cuts, cited the soft economy and a lack of spending by current clients as the rationale.

Carmichael Lynch in Minneapolis gave a similar explanation for laying off 12 employees, or about 4 percent of its staff, last week.